Throwback Thursday: The Education Lottery

Twelve years ago today, former Governor Mike Easley signed legislation establishing the so-called “North Carolina Education Lottery.” From the very start, the proposal sharply divided the public; opponents considered the lottery a regressive, thinly-disguised tax on the poor — and the way the controversial bill became law is a case study in political shenanigans.

During the closing days of the 2005-2006 session, Democrats held a narrow majority in the General Assembly. At the time, the Senate consisted of 29 Democrats and 21 Republicans, while the balance in the House was tighter — 63 Democrats to 57 Republicans.1 The Democrat-led House supported passage of the lottery bill, but its chances to become law seemed unlikely, since it was opposed by a narrow bipartisan coalition of just enough Republicans and Democrats in the state Senate. Enough — by just two votes.

But something tricky was about to happen that would make even Frank Underwood blush.

After a marathon 20-hours on the floor to close the final week of the 2005-2006 long session, the Senate’s then President Pro-Tem (Democrat Marc Basnight) told his colleagues and the press that official business had been concluded and that no more votes would taken for the year — meaning the Education Lottery wouldn’t be considered again until the legislature came back in May of 2006. The General Assembly would only reconvene for the next legislative day (a Tuesday) to say their goodbyes and adjourn sine die.

But over that weekend, Basnight learned that two Republican Senators — who were on record as opposing the lottery bill — planned to be absent on the day the Senate would adjourn for the year. Since no votes were to be taken, Senator Harry Brown (of Onslow County) hoped to be abroad on his honeymoon, and Senator John Garwood (of Wilkes County) wanted to be home to recover from a serious infection — instead of going back to the state’s capital for what should have been a largely ceremonial event.

Seizing on the opportunity of the two absent Senators, at the last minute the President Pro-Tem called for a special vote without Senators Brown and Garwood, and, as anticipated, the new vote count was now a tie: 24-24. Had they been present, the bill would not have passed.

According to our state constitution, if there is ever a tie in the Senate, the Lieutenant Governor (who also acts as President of the Senate) gets to cast the tie-breaking vote. And Democrat Bev Perdue (who was Lieutenant Governor at the time) was ushered in right on cue.

But when the final vote on the bill was about to be taken, Republican Senator Hugh Webster (of Alamance County) voiced his objection: he said that the upcoming vote was in violation of Article II Section 3 of the North Carolina State Constitution, which requires that any bill that raises revenue be “read in” three separate times on three separate days by both Chambers.

Lieutenant Governor Perdue, who supported the lottery (and was presiding on the floor) countered that because lawmakers had previously voted to suspend the rules, a vote could be taken immediately — and not held over for another day as is normally required. Senator Webster was overruled and Perdue cast the tie-breaking vote. The legislation was sent to Governor Mike Easley, who then signed it into law on August 31.

But wait, there’s more!

Prior to its passage, Governor Easley had promised a skeptical public that any Education Lottery funds would be used only to “supplement and not supplant existing spending for education” and that he would in no way “recommend or sign legislation that reduced the state’s spending for education.” But somehow, that’s not the way it turned out.

In a classic bait-and-switch maneuver right before the final vote, the language of the bill had been changed to allow money from the Education Lottery to replace other education funding sources. And, it’s worth mentioning, be diverted to the state’s General Fund.

This sleight-of-hand would soon prove useful to Governor Perdue, who faced a massive budget shortfall in February 2009. To help balance the budget, she emptied $50 million from lottery reserves. The next year, she diverted another $69 million to the state’s General Fund, money which was intended to be used solely for school construction. These shenanigans prompted Dr. Terry Stoops to famously refer to the North Carolina Education Lottery as “Bev’s piggybank.”

In response, Republican Representative (now United States Senator) Thom Tillis sponsored legislation in 2009 to remove the word “Education” from the lottery’s name. “It’s just truth in advertising,” quipped Speaker Tillis at the time. His bill never made it out of committee.

1(Editor’s note: The year before, the balance of power in the House was evenly divided, with 60 Democrat members and 60 Republican members — and interestingly, for the only time in North Carolina’s history, the two parties shared leadership of the body with Democrat Jim Black and Republican Richard T. Morgan serving as Co-Speakers of the House. It remains questionable if this novel arrangement was even constitutional.)